Staff Reporter :
Bangladesh’s capital, Dhaka, has become significantly more expensive for foreigners, climbing 14 spots to rank 140th on the list of the world’s most expensive cities for international employees.
According to Mercer’s 2024 cost-of-living data, Dhaka has outpaced Indian capital New Delhi (165th) and Pakistan’s capital Islamabad (224th), alongside other cities in these countries, including Bengaluru (195th), Hyderabad (202nd), Karachi (222nd), and Kolkata (207th).
Hong Kong, Singapore, and Zurich are currently the costliest cities for international workers, according to Mercer’s data. Indian business hub Mumbai ranks 136th, making it the country’s most expensive city. Swiss cities Zurich, Geneva, and Basel round out the top five most expensive cities.
The cities with the lowest living costs include Islamabad, Lagos, and Abuja.
Several key factors have influenced the global economy in recent years, continuing to impact the cost of living in major cities in 2024. Inflation and exchange-rate fluctuations directly affect the pay and savings of internationally mobile employees. Economic and geopolitical volatility, local conflicts, and emergencies have led to additional expenses in housing, utilities, local taxes, and education.
High living costs in top-ranking cities like Hong Kong, Singapore, and Zurich are driven by expensive housing markets, high transportation costs, and higher prices for goods and services. In contrast, cities like Islamabad, Lagos, and Abuja have lower living costs partly due to currency depreciations.
Mercer’s annual Cost of Living City Ranking provides valuable insights for global mobility operations and international assignees, listing 226 cities from the most to the least expensive places to live.
Half of the 10 most expensive cities for international assignees are in Western Europe, with Switzerland home to four. Southeast Asian cities lead the list, with Hong Kong and Singapore in the first and second positions.
“High living costs may cause assignees to adjust their lifestyle, cut back on discretionary spending, or even struggle to meet their basic needs,” said Jean-Philippe Traber, a spokesperson for Mercer. “Employers can offer compensation packages that include housing allowances or subsidies or provide other support services. They can also explore alternative talent sourcing strategies.”
European cities feature heavily in the top 10 most expensive places to live, with London joining the ranking in 8th place. Other expensive cities in the region include Copenhagen (11th), Vienna (24th), Paris (29th), and Amsterdam (30th). Dubai has become the costliest city in the Middle East for international employees, ranking 15th globally. Tel Aviv is 16th, followed by Abu Dhabi (43rd), Riyadh (90th), and Jeddah (97th).
In South America, Montevideo in Uruguay is the most expensive location for international employees, ranked 42nd. It is followed by Buenos Aires (77th) and Sao Paulo (124th). Buenos Aires and Santiago in Chile have become less expensive, with Santiago falling to 160th on the list.
In North America, New York City remains the most expensive city, ranked 7th globally. It is followed by Nassau, Bahamas (9th), Los Angeles (10th), Honolulu (12th), and San Francisco (13th). Mexico City and Monterrey have seen significant jumps in the rankings.
The highest-ranking African cities are Bangui (14th), Djibouti (18th), and N’Djamena (21st). The least expensive cities in the region include Blantyre (221st), Lagos (225th), and Abuja (226th).
In Asia, besides Hong Kong and Singapore, the most expensive cities include Shanghai (23rd), Beijing (25th), and Seoul (32nd). The least expensive are Karachi (222nd), Bishkek (223rd), and Islamabad (224th).
For the Pacific region, Sydney tops the list at 58th place, followed by Noumea (60th), Melbourne (73rd), and Brisbane (89th). Auckland and Wellington remain the least expensive, ranking 111th and 145th, respectively.
On average, costs of products have increased, with olive oil seeing the most notable rise. For example, Buenos Aires experienced a 694% increase, while Istanbul saw a 145% rise.
Housing costs are a major factor in the rankings, with significant volatility between 2023 and 2024. For instance, Istanbul saw an average housing price increase of 301%, while Tel Aviv saw a 22% decrease and Minsk a 10% decrease.
Most of the top 10 cities also saw moderate housing cost increases, between 3% and 8%, except Nassau, Bahamas, which reported no change.
A shortage of housing relative to demand is driving up prices, making it challenging for organizations to attract and retain top talent for international assignments.
The most significant increases in living costs were seen in African cities (Accra, Addis Ababa, and Cairo), Eastern European cities (Tirana), and Istanbul. High inflation is likely the main reason, except in Tirana, where exchange fluctuations are the main cause.
The most significant decreases in cost of living rankings were seen in African cities (Lagos, Luanda, and Abuja), South American cities (Santiago), and Eastern Asian cities (Osaka). Currency devaluations have driven these decreases, despite rising inflation in many of these countries. For example, inflation rates increased to more than 20% for Nigeria and Angola between March 2023 and March 2024.